The Pensions Regulator has fined the trustees of Pakistan International Airlines for failing to audit its accounts on time for two years in a row.

Under section 10 of the Pensions Act 1995, TPR has used its fining power for the first time against trustees of the Pakistan International Airlines pension scheme for their governance misconduct.

Four of the firm’s Retirement and Death Benefits Plan’s trustees have received a fine of £500 each as they failed to meet their auditing requirements in 2015 and 2016 and without the provision of a valid excuse.

Trustees and scheme managers of most pension schemes are legally required to obtain audited accounts and an auditor’s statement about scheme contributions each year, TPR has highlighted.

The decision to fine Pakistan’s airline firm was made by the Determinations Panel who agreed that the scheme’s trustees had seen their auditing duties as a “low priority”, event after the scheme’s actuary highlighted the problem to TPR in a breach of law report in November 2016. The Panel also noted that the trustees had “ample time” resolve its breaches and did not put forward a justified excuse for its shortfalls.

TPR executive director of frontline regulation Nicola Parish commented: “We will take action if we believe members’ benefits are at risk from failures in a scheme’s governance and administration. Obtaining audited annual scheme accounts is a statutory requirement and a fundamental aspect of good governance.

“Failure to obtain audited accounts can hinder a scheme’s ability to obtain a valuation and can also be an indication of wider governance failings.

“This case, and the first use of our section 10 power to enforce against breaches of this nature, is in line with our clearer, quicker and tougher approach. We will make full use of the powers available to us.”

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